Stressed assets case: HC asks RBI to make final submissions

ET Bureau|

Aug 14, 2018, 11.40 PM IST

0Comments

RBI had on Thursday declined the need for an extension sought by the power companies for completing resolution proceedings for stressed assets.

NEW DELHI: The Allahabad High Court has asked the Reserve Bank of India (RBI) to make its final submissions on the case filed by power companies against its February 12 circular on stressed assets. The high court will now take up the case for hearing on August 20.

The power companies presented their arguments against the circular on Tuesday. The companies cited the 40th parliamentary standing committee report, which notes that the outcome of RBI's revised framework with respect to the electricity sector has been disappointing as the non-performing assets (NPAs) of banks have risen.

“The committee express its deep anguish over the situation and expect that RBI should have considered macro issues of electricity sector before finalising the guidelines as the revised framework of RBI will not help the electricity sector in its revival prospects,” the committee had said in its report.

RBI had on Thursday declined the need for an extension sought by the power companies for completing resolution proceedings for stressed assets. The apex bank in a letter to the department of financial services also blamed the government for power sector NPAs through policies favoring the PSUs.

The total outstanding loans of scheduled commercial banks to the power sector (including renewables) stood at Rs 5.65 lakh crore at the end of March.